Magazine article American Banker

Fed, Nacha Shift Sales Pitch for Electronic Banking to Corporations

Magazine article American Banker

Fed, Nacha Shift Sales Pitch for Electronic Banking to Corporations

Article excerpt

The Federal Reserve System and the National Automated Clearing House Association have launched the second phase of their effort to promote electronic bill payment services.

The two formed their alliance in March in an attempt to expand transaction volume.

The first phase of the project, conducted over the summer, broadly explained the goals to the banking industry. The second phase involves direct mail campaigns aimed at the over 20,000 corporations.

In this phase, the clearing house group and the Fed are encouraging direct electronic payments to such corporate billers as mortgage and insurance companies, utilities, and charity groups.

It is hoped that electronic bill payment can help reduce the use of paper checks. The banking industry handled over 60 billion checks last year.

Individually, the two partners have worked for years to promote the automated clearing house network, which was created by the federal government to replace checks in the case of recurring payments.

But 20 years later, check volumes are still growing - and thus officials from the public and private sectors have finally joined forces.

"We hope it makes a significant difference in raising awareness among corporations and nonprofit organizations about the benefits of using the ACH," said Paul Connolly, first vice president of the Federal Reserve Bank of Boston.

Mr. Connolly said the joint effort is "rather new for us," and may lead to "future efforts with Nacha and other payment system participants. …

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